Govere abused NSSA funds — Audit

Govere abused NSSA funds — Audit NSSA

nssa1Happiness Zengeni and Tinashe Makichi
Former National Social Security Authority board vice chairperson David Govere has come under the spotlight after an audit report revealed that two of his companies accessed funding from the authority in spite of a policy which says the institution should not lend directly to companies or individuals.

According to a NSSA special internal audit which was instituted by the new board last year, Mr Govere accessed funding amounting to $3 million during the time he was serving as chairman of the investment committee.

Mr Govere was the vice chairperson of the NSSA board as well as the chairman of the board investment committee for the period January 01, 2007 to March 31, 2010.

In August 2009, Harambe Holdings received $1,5 million at three percent from NSSA through Interfin Merchant Bank while in October the same year Tacoola limited accessed $1,5 million through NMB Bank also at three percent.

The audit report said NSSA disbursed the funds to the banks as normal money market placements but with a specific condition that the funds were for onward lending to a board member’s group of companies.

“Two instances were noted where NSSA lent funds to companies owned by Mr Govere through two banks,” said the report adding that it cannot rule out the possibility of other board members having benefited from NSSA funds directly in the same fashion.

The report said that the interest rate of three percent was clearly not to the fund’s best commercial advantage in view of the market conditions at the time.

“The advances were made with full knowledge and approval of the investment director Shadreck Vera and general manager James Matiza.

“In response to an internal audit query at the time Mr Vera stated that the transactions were within the full jurisdiction of management to action,” said the report.

Despite Mr Vera’s remarks, there is still no evidence of declaration of interests in the insider loans highlighted and there is also no evidence of full board approval of this lending.

The Harambe Holdings borrowing was a revolving credit facility with a 120-day tenure for the $1,5 million at three percent per month payable monthly.

Tacoola Limited, a company wholly owned by Harambe Holdings also received funding of $1,5 million in August 2009.

According to the report, NSSA only deals with banks and money market investment units are not allowed to lend directly to beneficiaries clients but only lend money to banks that will carry their own credit analysis.

Mr Govere last week said there was nothing wrong with the transfer as it was above board.

“When the funds were transferred to the companies as alleged by the report, I was not a member of the NSSA board. To make things clear I was in the United Kingdom that time recovering from an accident that transpired in July 2009.

“Some of those companies mentioned in the audit were actually franchises of Harambe who went to the bank like any other companies do and managed to get bank approvals to access funding. Harambe never borrowed any funds from NSSA,” said Mr Govere.

“I was a board member at NSSA before it was suspended and when the GNU came I was approached by the minister in charge at that time to join the new NSSA board for continuity. I accepted the offer and joined the board. It is during the time when the NSSA board was suspended when the funds were transferred to companies mentioned in the report.”

Mr Govere said allegations that funds were transferred to his companies when he was board a member are baseless.

“There was no foul play whatsoever in the transfer of the funds as other big companies like Innscor and Delta actually borrowed funds from NSSA otherwise big sums of money,” said Mr Govere.

Share This: